RBC considers investing $1 bln in prop trading spinout -report

TORONTO

TORONTO May 30 (Reuters) - Royal Bank of Canada may
invest as much as $1 billion in a hedge fund spun off from its
proprietary trading business, Bloomberg News reported on Friday.

RBC, Canada's largest bank by market capitalization, has
been considering options for the proprietary trading unit -- in
which the bank invests with its own funds -- as it works to
comply with the Volcker rule, a new U.S. regulation meant to
prevent banks from taking on too much risk.

The fund will open by year-end and will be called Taursa
Capital Partners, Bloomberg said, citing two people with
knowledge of the matter. It said RBC would invest in the fund
without retaining an ownership stake.

RBC spokesman Kevin Foster would not comment on whether the
bank planned to spin out the unit. "We are actively working to
restructure our proprietary trading business to comply with the
Volcker rule," he said.

The bank reported stronger-than-expected second-quarter
results last week, driving its shares to an all-time high. The
stock slipped 12 Canadian cents to C$74.64 in Toronto on Friday.